Ever watch “Flip this House” or any other TV reality show that illustrates real estate developers making huge returns on home remodels? It is true that there are big profit opportunities in flipping real estate, however just like any other investment opportunity, there are also risks. Whether or not you intend to sell your Cambrian home, this article outlines how you can safely add value to your home without taking big risks. Of course, remodeling requires some upfront capital that won’t be realized until you sell. Let’s take a look at those items that can really add BIG dollars to your home’s resale value.
As a real estate developer myself, I can provide first hand examples of the value which can be created in remodeling homes. In my previous article I outlined simple cosmetic changes that add value (ie clean-up, landscape, paint, carpets, etc). The big ticket items are what add big ticket profits. Of course these are items like new kitchens, baths, roofs and fixing bad configurations. Can you live thru a remodel OR move out before selling? That is the question. If so, and taking a small risk is within your means and temperament, remodeling can pay great dividends.
Expenditures for remodeling should match the quality of the home and neighborhood. It is not necessary to have a hi-end contractor do a remodel in an area of mid-end homes, no matter how picky you are. Remember, if you are doing the remodel to sell and make a profit, it is only necessary to make the house attractive to another retail buyer looking in your particular neighborhood (not to impress your neighbors). Contractors who work with investors offer the most aggressive pricing, however options and change orders may be minimized. This should not be a problem if you keep the objective in mind (ie a good quality, new, modern looking home). In addition, complete kitchen and bath remodels may be less than you think, thanks to low cost prices of cabinets, vanities and granite coming from overseas (yes, it’s not just consumer electronics and toys that are made in China). Again, your choices are limited, but the basic materials are good quality and provide a new and modern look and feel.
If this is your 1st remodel, be prepared to spend time picking out basic fixtures and other details. Once you have defined exactly what you want, and picked out the fixtures, appliances, etc, stay out of the way and let your contractor get the job done. He will let you know when questions and issues arise (which they always do). With that said, it is also prudent to visit the job site multiple times a week to make sure the work is getting done as planned.
This is a very simple outline and does not touch on the many details of a major rehab, such as screening contractors and getting an accurate scope of work in writing (to name just a few). The good news is that there are unlimited resources available on-line to help you. Be sure you are comfortable with and have the time to do the work necessary to coordinate a project of the scope you are considering. It is not for everybody, but making the sacrifice can pay big profits. Good luck!